Third positive month for global equities

Global equities ended the month of May up, as economic data from Japan and India raised investors' hopes that the global recession might be nearing an end.

US equities registered their third consecutive month of positive returns and the biggest three-month percentage gain in 10 years. The Dow Jones Industrial Average ended the week up 2.69%, the Standard and Poor's 500 was up 3.61% and the Nasdaq Composite was once again the week's best performer, ended 4.87% higher.

Similarly, European equity markets also rose for the third month, climbing nearly 32% since the lows of March, as inflation in the Eurozone has fallen to zero. In Paris, the CAC 40 ended the week 1.54% higher, the Xetra Dax in Frankfurt closed 0.4% up, while in London the FTSE 100 index rose 1.21% as reports emerged that UK house prices increased for the second time in three months, registering the largest one-month price hike since late 2006.

The Malta Stock Exchange (MSE) index continued its oscillating trend, with another overall positive week, following last week's negative performance. The index soared a healthy 2.56%, reaching 3,059.257 points, a level not reached since early February. The MSE's loss this year to date has now shrunk to just over -4.6%. The upbeat tone was primarily supported by continuing gains in HSBC Bank Malta plc, International Hotels Investment plc (IHI) and Malta International Airport plc (MIA), all of which posted solid gains.

Ten equities were negotiated on the MSE this week, with half closing in positive territory, three closing negative and two remaining unchanged. A total of 291 transactions were registered on the exchange, with a turnover of nearly €11.7m.

In the equity market, 121 deals for a total of €275,163 were executed; in the corporate bond market, 77 deals were carried out for €747,294; there were 75 transactions worth over €7.74m in the government bond market saw, while 15 deals were carried out in the Treasury Bills market for nearly €2.9m.

Bank of Valletta plc (BoV) was this week's most traded share as 39,348 shares were exchanged across 52 deals. Lack of direction remains the order of the day with this stock as moderate gains in the initial trading sessions were almost totally erased in the latter part of the week. The equity closed fractionally higher, at €2.39, or 0.04% above last week's closing price.

There was also a decent volume of trading in International Hotels Investments plc (IHI) shares whose price continues to march northwards, advancing week after week. The equity closed at €1, adding a further 5.26% in value compared to last week's closing price. Total gains this year have now ballooned to 11.73%, clearly outperforming any other equity on the MSE.

HSBC shares traded at a high of €2.599 and a low of €2.569, closing the week at €2.598, a 3.92% increase, after 28,997 shares had been traded across 25 deals.

On the other hand, Go plc surrendered some of the gains it had slowly achieved over the past weeks, ending the week 1.15% lower. Volume was, however, lower than usual, with 23,030 shares changing hands in 19 trades. Over the past five months of trading the equity has lost 1.83% compared to its 2008 closing price.

MIA was this week's best performer, advancing nearly seven per cent. This was, however, on the back of scant volume, as only 3,200 shares were traded in three deals in one trading session.

The company directors' statement was issued to report that in the first four months of the year MIA's financial position remained sound. Although lower revenues are anticipated from a continued decline in passenger traffic, this downward trend is expected to be compensated by an increase in income from the retail and food and beverage outlets, as the company diversifies its business.

Lombard Bank plc traded six times this week, with 3,435 shares changing hands, and its share price advanced 1.89%, closing the week at €2.26.

Both Fimbank plc and Maltapost plc had minimal trading this week with both equities remaining unchanged throughout. The equities closed the week at $1.29 and €0.71 respectively.

In a company announcement this week, Maltapost said its profit for the six months ending March 31 fell by 26% over the same period last year. This fall was attributed to extraordinary events last year such as the increased volume of mail before the general elections and the issue of philatelic material to mark the introduction of the euro.

Maltapost said it was still facing challenges because of the substitution of traditional mail by e-mail communication. Nevertheless, the company intends diversifying its sources of business and believes it has a sound balance sheet to achieve its plans.

A single trade of 5,000 shares in RS2 Software plc on Friday led the equity to shed 4.17% in value to close the week at €0.69.

Simonds Farsons Cisk plc's share price lost €0.008, or 0.43%, to close the week at €1.86, after 3,000 shares changed hands in two deals.

Datatrak Holdings plc this week issued an interim directors' statement in which it said the company's activities on the international markets had been significantly affected by the global downturn.

The directors added that a concerted effort was taken to further reduce operating costs and that revenue streams from major projects had been preserved.

This article, which was compiled by Jesmond Mizzi Financial Services Limited (JMFS), does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed to conduct investment services by the MFSA. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact JMFS at 67/3, South Street, Valletta, or on Tel: 2122 4410 or e-mail jmizzi@jmfs.net.